West Red Lake Gold Mines

West Red Lake Gold Mines Ltd. (TSXV: WRLG, OTCQB: WRLGF) is a Canadian gold mining company that has successfully transitioned from a development-stage entity to an operational producer. The company acquired the Madsen Mine in 2023 as a distressed asset and achieved production within two years, demonstrating exceptional execution capabilities. The company operates in the prolific Red Lake Gold District of northwestern Ontario, which has produced over 30 million ounces of gold and hosts some of the world's richest gold deposits.

The company's primary asset is the operational Madsen Mine, supported by a 47 square kilometer land package in the Red Lake district. Additionally, West Red Lake Gold owns the Rowan Property, covering 31 square kilometers and including three past-producing gold mines. The company has established itself as one of the rare new entrants to gold production, with mining operations ramping up throughout 2025.

West Red Lake Gold's business model centers on operating high-grade, low-cost underground gold mines in a proven geological district. The company has demonstrated its ability to restart complex mining operations through significant infrastructure investments, technical expertise, and systematic risk mitigation approaches. Current operations at Madsen are producing gold at approximately 650 tonnes per day mill throughput with 95% gold recovery rates.

The investment opportunity in West Red Lake Gold is anchored by several compelling factors that position the company for significant value creation. The Madsen Mine represents a high-grade gold asset with a prefeasibility study indicating a net present value of C$496 million based on a long-term gold price of US$2,640 per ounce. The mine is projected to produce an average of 67,600 ounces annually over six full production years with an all-in sustaining cost of US$1,681 per ounce.

Current market conditions favor new and growing gold miners, with this sector outperforming established producers by substantial margins. New and growing gold miners have averaged 154% returns over twelve months compared to 45% for the GDX and 53% for the GDXJ. West Red Lake Gold represents a rare new entry in this high-performing category, positioning it for potential revaluation as production scales.

The company benefits from multiple expansion opportunities beyond the current Madsen operations. The Rowan Project has demonstrated strong economics in its preliminary economic assessment, showing a 42% after-tax internal rate of return and C$125 million net present value at US$2,500 per ounce gold. This toll milling operation would require only C$70 million in initial capital and could produce over 35,000 ounces annually for five years.

Near-term growth potential exists through expanded mining at Madsen, where larger stopes and mining complexes are being developed based on extensive definition drilling. The company has completed over 90,000 meters of definition drilling, tightening drill spacing from 20 meters to 7 meters to improve geological modeling accuracy. This approach has resulted in significant increases in mineable tonnage and contained ounces in specific mining areas.

West Red Lake Gold is led by an experienced management team with proven track records in mine development and operations. Shane Williams serves as President and Chief Executive Officer, bringing operational expertise to the leadership role. The technical leadership includes Will Robinson as Vice President of Exploration, who holds professional geologist credentials and serves as the qualified person for technical disclosures.

The management structure includes Maurice Mostert as Vice President of Technical Services, providing engineering expertise for mine operations and development. Harpreet Dhaliwal serves as Chief Financial Officer, managing the company's financial strategy and capital allocation. The operational team is led by Hayley Halsall-Whitney as Vice President of Operations, overseeing day-to-day mining activities.

The board of directors provides strategic oversight with Tom Meredith serving as Executive Chairman and Director. Additional board members include Duncan Middlemiss, Hugh Agro, John Heslop, and Susan Neale. The company benefits from advisory support from industry veterans including Tony Makuch, Frank Giustra, Shawn Khunkhun, Robert McLeod, and Ryan Weymark.

The management team has demonstrated execution capabilities through the successful restart of Madsen Mine operations. They implemented comprehensive technical and infrastructure improvements, hired and trained over 200 employees, and established operational readiness within a two-year timeframe from acquisition to production.

West Red Lake Gold's growth strategy focuses on expanding production through operational optimization at Madsen and developing the Rowan Project as a second producing asset. The immediate growth phase centers on ramping Madsen production to full capacity while implementing efficiency improvements through larger stope mining and optimized mine design.

The company's technical approach emphasizes mining larger stopes in complex arrangements rather than the smaller, high-grade stopes outlined in the prefeasibility study. This strategy aims to reduce mining costs through more efficient longhole stoping methods while accessing additional tonnage that becomes economic at higher gold prices. The mill capacity of 1,089 tonnes per day – and knowledge that the mill ran reliably at 1,200 tpd a few years ago – means the mill has  40% more throughput capability than the 800-tonnes-per-day initially targeted.

Medium-term growth will be driven by developing the Rowan Project as a toll milling operation. The preliminary economic assessment demonstrates strong economics with minimal capital requirements due to available mill capacity in the region. The company plans to complete a prefeasibility study by Q3 2026 while advancing permitting activities in parallel.

Exploration activities provide additional growth vectors through resource expansion at both properties. At Madsen, targets include the Upper 8 discovery, Fork deposit near-surface mineralization, and multiple in-mine expansion opportunities. The company has identified significant drilling potential at North Shore and other regional targets that could add substantial resources.

The long-term strategy includes potential acquisitions to build a larger regional production platform. The company's position in the Red Lake district, combined with operational expertise and financial capacity, positions it to consolidate additional assets and expand beyond current operations.

West Red Lake Gold maintains a solid financial position with approximately C$18 million in cash as of March 31, 2025. The company has 343.2 million shares issued and outstanding with a fully diluted share count of 517 million shares including warrants, options, and other securities. The current market capitalization of approximately C$300 million provides reasonable valuation relative to the asset base.

The Madsen Mine generates substantial free cash flow potential with projected annual free cash flow of C$93 million at current gold prices. The prefeasibility study economics indicate strong profitability with net present value significantly exceeding current market valuation. Operating metrics show the mine achieving 95% gold recovery rates with improving grades as fresh stope material increases in the mill feed.

Revenue generation has commenced with 5,350 ounces produced from January to mid-June 2025. Mill throughput has averaged 650 tonnes per day with successful trials at 800 tonnes per day, indicating capacity for increased production. Gold grades have shown improvement as mining transitions from bulk sample stockpiles to fresh stope material.

The company's capital structure includes various warrant series with exercise prices ranging from C$0.68 to C$1.00, providing potential future funding sources. Major shareholders include Sprott Resource Lending at approximately 9% ownership and gold-focused institutions holding approximately 30% of outstanding shares. Management and insider ownership represents approximately 10% of the company.

Capital expenditure requirements remain manageable with most major infrastructure investments completed.. Equipment purchases continue with recent additions including underground loaders and haul trucks to support expanded operations.

West Red Lake Gold represents a compelling investment opportunity in the gold mining sector, offering exposure to high-grade production in a world-class mining district. The company has successfully navigated the challenging transition from development to production, demonstrating operational expertise and execution capabilities. Current operations at the Madsen Mine provide immediate cash flow generation while multiple expansion opportunities offer significant growth potential.

The investment thesis is supported by strong technical fundamentals including high-grade ore reserves, proven metallurgy, and extensive infrastructure. Financial projections indicate substantial value creation potential with the Madsen Mine alone showing net present value significantly exceeding current market capitalization. The addition of the Rowan Project provides a clear pathway to increased production and enhanced company valuation.

Risk factors are appropriately managed through systematic mitigation strategies and management's demonstrated competence in addressing operational challenges. The company's position in the Red Lake district provides access to one of Canada's premier gold mining regions with extensive geological potential for resource expansion and discovery.

Market conditions favor new gold producers with strong operational track records and growth potential. West Red Lake Gold's combination of current production, expansion projects, and exploration upside positions the company for outperformance in a favorable gold price environment. The investment opportunity is enhanced by reasonable valuation metrics relative to asset quality and production potential, making it an attractive option for investors seeking exposure to growing gold production.